Download - This Month In Real Estate June 2010
Brought to you by:
KW Research
Commentary 2
The Numbers That Drive Real Estate 3
Recent Government Action 9
Topics for Home Buyers, Sellers, and Owners 11
Released:
June 7, 2010
KW Research 2
CommentaryThe housing sector continues to show signs
of recovery. Together the tax credit (which expired at the end of April), the more upbeat consumer confidence, and favorable market conditions all contributed to bolstering April’s sales activity ‐ with existing home sales increasing for the second straight month.
The return of buyer confidence with much of the home price correction believed to be over, encouraging economic developments and historically low mortgage rates, will provide the stepping stone for further market stabilization.
Meanwhile, stagnant job growth and elevated levels of foreclosure continue to be cause for concern. The government is now taking proactive steps to restructure the mortgage industry with risk‐management measures seen by experts as a “huge cut in red tape” that would ultimately benefit consumers.
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KW Research
Home Sales 4
Home Price 5
Inventory 6
Mortgage Rates 7
Affordability 8
The Numbers That Drive Real Estate
KW Research 4Latest Data Release: May 24, 2010Source: National Association of Realtors
Seasonally Adjusted Home Sales ‐ In Millions
Home SalesIn Millions
Existing home sales strengthened in April to 5.77 million, up 8.7% from March and 22.8%from last April. This is the tenth consecutive month of year‐over‐year increases. According to Lawrence Yun, NAR chief economist, although part of the uptick was expected from the tax credit, there’s also been a return of buyer confidence, for those who remained on the sideline last year. The return of confidence is a result of stabilized prices, an improved economy, and continued advantageous interest rates. In March, 49% of sales were from first‐time buyers.
April 08‐09
April 09‐10
Impact of Tax Credit Deadline
KW Research 5
Home PriceIn Thousands
The median price for an existing home was $173,100 in April, up 2.1% from a year ago and 4% from March. Distressed homes, accounting for a third of last month’s sales, continued skewing prices downward slightly as they typically are discounted 15% compared to typical home sales. Overall, prices this past year showed increased stability over the previous year.
Home Price ‐ In ThousandsApril
08‐09
April 09‐
10
Increased Stability
Latest Data Release: May 24, 2010Source: National Association of Realtors
KW Research 6
Inventory ‐In Millions
Total housing inventory rose slightly to 4.04 million in March, representing slightly less than an eight‐and‐a‐half month supply of sales (if homes continue to sell at the current pace consistently and no new homes come on the market). Compared to the previous year, there are now 3% more homes on the market. Although this is the first rise in twenty consecutive months of decline when compared to the previous year, NAR’s chief economist believes this increase can be attributed to the summer selling season and that home prices are back on track.
Number of Homes Available for Sale ‐ In Millions
Number of homes available for sale
3% more homes on market
Latest Data Release: May 24, 2010Source: National Association of Realtors
April 08‐09
April 09‐10
KW Research 7
Mortgage Rates30Year Fixed
Mortgage rates dipped back below 5% this month due largely in part to the European debt crisis. As confidence in the value of the Euro eroded, more investors chose the U.S. dollar instead. With more demand for dollars, the cost of debt (interest rate) dropped. This event has also shown the global recovery is not free‐and‐clear of roadblocks to complete recovery. However, experts still anticipate rates will increase to between 6% and 6.5% by the end of the year. As the recovery gains increasing traction, the Federal Reserve will need to increase rates to prevent inflation.
Source: Freddie Mac
Average Weekly Mortgage Rates
One‐Year Average 5.05%
KW Research 8
Affordability ‐Percentage of Income
Affordability remains advantageous, supported by some of the lowest mortgage rates in decades as well as less expensive home prices. The home price‐to‐income ratio continues to remain well below the historical average of 25%. The ratio now stands at 14.9%.
Affordability as of April every year. Calculations assume a 20% down payment.
Source: National Association of Realtors
The percentage of a median family’s income required to make mortgage payments on a median‐priced home
Historical Standard: 25%
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KW Research
Recent Government Action
FHA Turns to Lenders toMonitor Brokers
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KW Research 10
FHA Turns to Lenders to Monitor BrokersAs the Federal Housing Administration (FHA), the government agency that insures home loans, saw its market share rise to about one‐third of the mortgage market last year, up from 2% in 2006, the number of brokers seeking to arrange FHA‐backed loans has mushroomed to 9,043 at the end of 2009 from 5,759 just two years earlier.
The agency, finding itself inadequately equipped to monitor its brokers, is shifting the responsibility to its lenders.
The FHA expects the new policies to result in better risk management, and the cut in red tape should produce better rates for consumers.
As of May 20, the FHA no longer certifies mortgage brokers or tracks the performance of brokers’ loans. Instead, lenders are now required to sponsor brokers and assume responsibility for loans they originate, including losses from fraud or mistakes in underwriting. In addition to revamping broker insight, the agency also beefed up oversight of its lenders by increasing net‐worth requirements to $1 million from $250,000. The change is in effect for one year for existing lenders.
Source: The Wall Street Journal
FHA
‐Insures home loans‐Certifies and oversee lenders
Borrowers
Lenders
Brokers ‐Make mortgage loans‐Sponsor and oversee brokers
‐Underwrite mortgages ‐Act as middlemen between lenders and borrowers
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KW Research
Topics for Home Buyers, Sellers, and
OwnersMyths about Distressed Properties – Debunked!
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KW Research 12
Myths about Distressed Properties –Debunked!
Have questions or want to learn more about distressed properties in your local area,
just ask your local Keller Williams associate!
Distressed properties – foreclosures and short sales alike – represent potentially great value for prospective buyers. However, common misconceptions about the time and money investment involved with buying such properties may keep many from inquiring further into this market. KW Research survey findings, taken from more than 2,500 KW associate respondents who have worked with distressed properties, can help steer clear of concerns as you make your way to homeownership.
It’s going to take forever to find one I want
3 out of 5 REO buyers and 1 in every 2 short sale buyers spent less than one month searching for a home before writing an offer.
How many offers do I have to write before one gets accepted? 10? 20?
7 out of 10 distressed property buyers wrote three or fewer offers
before one was accepted.
I know I am getting a good deal but will the cost of repairs eat
up the savings?
Half of REO buyers and almost one‐third of short sale buyers spent less than $5,000 in repairs.
KW Research 13
Although it is important to stay informed about what is going on in the national economy and housing market, many different factors impact the real estate market in your own area.
Talk to your KW associate for assistance interpreting the conditions in your local market.
KW associates are equipped with the knowledge and information to help you navigate through the home‐buying or selling process in this challenging market.
Your Local Market
KW Research 14
Local Market Absorption Rate
KW Research 15
Number of Homes “in play”
KW Research 16
Avg Price per sq ft
KW Research 17
Sold to List Price Comparison
KW Research 18
Avg Price For Sale VS Sold
KW Research 19
About Keller Williams Realty
Founded in 1983, Keller Williams Realty, Inc., is an international real estate company with more than 77,000 associates and 677 offices across the United States and Canada. The company began franchising in 1991 and, after years of phenomenal growth and success, became the third‐largest U.S. residential real estate firm in 2009.
The company has succeeded by treating its associates as partners and sharing its knowledge, policy control, and company profits on a system‐wide basis.
By focusing on helping associates realize their fullest potential, Keller Williams Realty is known as an industry leader in its family culture, unmatched education, profit sharing business model, phenomenal coaching program, and technology offerings.
www.kw.com
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About Paul W. Drury
• Originally licensed as an agent in Ohio in 1986, Paul began withLehman Johnson Real Estate in Elyria. He acquired his Real Estate Brokerage License in 1992 and became an Associate broker with West Shore Realty. In 1995 he moved his brokerage license to Continental Realty Investment where he began to focus on additional work with commercial and investment real estate. During these years he also performed professional appraisals with The Appraisal House.
• In 2001 he began Drury Realty Consulting and worked as an independent Real Estate Consultant and worked on his own until 2009 when he joined Keller Williams Realty, Greater Cleveland West. “Being a part of the Keller family provides me with tools and serves unachievable strictly on my own, provides me with the tools and networking of a huge national network, while still enabling me to work, act, and function as the manager of my own business. It’s the best of both worlds.” – Paul
• Paul's Home Page
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What we have to offer sellers
• Sellers now have access to tools unimaginable just a few years earlier. Keller Williams Realty doesn’t spend valuable resources promoting its own name. Instead it puts resources into the best tools and resources for education and training, providing the highest quality real estate professionals into local communities.
• Properties put up for sale by Paul are also listed in KWLS, a national MLS, implemented by Keller Williams the third largest company in the US; local MLS; NEOHREX (Northern Ohio Real Estate Exchange); and on national sites such as Trulia, Zillow, CyberHomes, and others.
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What we have to offer sellers ( Cont’d)
• Other tools brought to bear by Paul include branding using unique web addresses with a virtual tour that can be emailed or the link can posted anywhere, to include Craig’s List and Back Page. Examples of properties sold recently using this method include:– 947 Gulf Road in Elyria (sold in 28 days) http://947gulfroad.com/
– 359 Gayle Drive in Sheffield Lake (sold in 57 days) http://359gayledrive.com/
– 327 Gayle Drive in Sheffield Lake (sold in 18 days) http://327gayledr.com/
– 810 Sandalwood Drive in Elyria (Sold in 19 days) http://810sandalwooddr.com/
• Not Planning to sell in the near future? – Would you still like to monitor what is happening in your neighborhood or area?
– Contact Paul now for a free periodic market update. No cost. No obligation.
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Properties currently for sale
• Properties currently for sale:– 37101 Hunters Trail in Avon ‐ http://37101hunterstrail.com/
– 4435 Porter Road in North Olmsted ‐ http://4435porterroad.com/
– 19593 Whitehead Road in Wellington ‐ http://19593whiteheadrd.com/
– 1 Grover Court in Grafton – http://1groverct.com– 416 Winckles Street in Elyria – http://416wincklesst.com– 149 Woodview Drive in Elyria – http://149woodviewdr.com
– 2815 West River Rd South in Elyria – http://2815WRiverRdS.com
• Would you like to see one of these homes? Click on the link for a tour.
• Would you like your home or property promoted like these?– Contact Paul for a free, no obligation, consultation today at 440‐385‐5650.
KW Research 24
What we have to offer buyers• Buyers of Real Estate also have access to tools
unimaginable just a few years before. Since Keller Williams doesn’t spend its money promoting its own name, it puts its resources into providing the best tools and resources to its systems, education, and training, thus providing the most professional real estate team members back into the communities.
• Paul is available most hours of the day directly without having to speak with assistants and he monitors his email regularly.
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What we have to offer buyers (Cont’d)
• Buyers can access Paul’s website at www.druryrealty.comand conduct their own searches as well as create their own search profiles for searching for properties anywhere in Ohio. If relocating out of Ohio, Keller Williams offers one of the finest relocation referral networks in the nation. While we may not be the biggest firm in Northern Ohio yet, we are in many areas of the national already.
• Paul’s website is easy to manage and he can set up search profiles for you so you get notified at about 8:30 am of any new properties that come available. He also has profiles set up on national websites such as Trulia providing for greater access to search tools.
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Investors & Shoppers – Foreclosure Watch
• Are you shopping for the deal of a century for your new home?
• Are you in the market to buy a home at a steep discount and try and fix it up and “flip it”?
• Are you looking for a home for someone else?• Want to know what is happening in your marketplace?• Send Paul an email today and request free market updates at [email protected]
• Call Paul directly at 440‐385‐5650.• No cost. No commitments. No obligations. No fuss. No kidding.
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Follow Paul on line…
Home Web Page• www.druryrealty.com
On Zillow• www.zillow.com/profile/PaulWDrury
On Trulia• www.trulia.com/profile/paulwdrury
On the Real Estate Global Network
• www.realestateglobalnetwork.com/profile/PaulWDrury
On Twitter• ‐ www.twitter.com/PaulWDrury
On FaceBook• ‐ www.facebook.com/paul.w.drury
On LinkedIn• www.linkedin.com/in/paulwdrury